Field of the Invention
The present invention relates generally to electronic trading systems. More particularly, the present invention relates to systems and methods for providing, within an electronic trading process, real-time pre- and post-trade analytics that assist traders make the decision of how to trade a particular tradeable asset.
Description of the Related Art
Trading systems exist that allow institutional traders to create and maintain trade orders. For example, Order Management Systems (OMS) are known, which perform a number of features including the creation and maintenance data relating to trade orders, compliance, and other investment bookkeeping functions. For example, The MacGregor Group, Inc. offers an OMS called MACGREGOR XIP®. Execution Management Systems (EMS) are also known. EMS's are another kind of trade tool that include facilities for creating electronic trade orders and execution features that allow traders to transmit electronic trade orders to a plurality of destinations electronically. An example of an EMS is ITG's Triton® EMS.
Trade orders are often transmitted to sell-side entities (e.g., broker dealers) for execution directly or via electronic trade routing networks. That is, a buy-side institutional trader, or other investor, may manually select a destination/broker for an electronic trade order in his or her OMS or EMS, which will then be transmitted to the designated broker destination via the network. Once a broker receives an order, they will typically use any and all means available to execute the trade order while maximizing gain to the broker.
Traders may also use algorithmic trading systems that utilize models and strategies to provide traders the best possible execution price while trying to reduce market impact. Institutional traders, i.e., buy-side traders who execute large volume orders, often employ algorithmic trading systems as an order destination to slice and dice large block orders into smaller, more easily executed orders that may be transacted at final trade destinations, such as an exchange, broker, electronic communication or crossing network (ECN) or alternative trading system (ATS), throughout a trading day or even over a longer period.
Buy-side institutional traders are faced with a number of challenges, including extreme volatility, counterparty risk, and rapidly evolving regulatory and economic environments. Furthermore, fragmentation of the market structure has made it increasingly difficult for the institutional trader to quickly access clean block liquidity while avoiding market impact.
It is often a difficult process to select a destination for an electronic trade order. This decision may involve consideration of a number of factors. One such factor, for example, is the historical performance of the destination/broker for the particular trade that is proposed. While analysts may provide reports on broker performance, no current trading system exists that provides real-time or near real-time pre-trade and post-trade analytics to a trader in the course of their trading process that provides decision support or automates decisions.